General Motors Company (GM) Earnings Call Transcript & Summary

Good morning, everybody. Welcome to EVCon, Benzinga's EV conference. This is an all-day event dedicated to all the happenings, all the things going on in the electric vehicle landscape. We put the call out back in the spring. And we asked you what kind of topics do you want to see for a full day event. And one of the things we got was EVs. We want some more EV coverage. Well, you asked and we delivered. We're talking to like -- I don't even know the exact number. I think it's between 15 and 20 companies today, most of them public. These are companies that are traded on exchanges, companies that are traded on OTC markets. And they're doing everything from batteries to infrastructure to actually making cars. We have a great slate of guests. Let me just share a little bit about who -- the kinds of companies that you will expect to hear from today. As I bring up -- this is a watch list that I made in Benzinga Pro. These are all the stocks that are going to be at the conference today: GM, Xpeng, Luminar, REE Automotive, Ideanomics, Helbiz. Did you guys see Helbiz yesterday? If you haven't seen Helbiz, look at HLBZ. I'll be honest, I don't know what's going on with the stock. I don't know why I did that. But I know we're going to hear directly from Helbiz today later on. So tune in for that. We've got Arcimoto. The company doing was really cool. They're called fun utility vehicles, the FUVs. They're really cool, like not quite a car, not quite a motorcycle, sort of in-between. So we have a great day of speakers, presenters today, we're going 9 to like 5:30 all day. So thank you, [ Lutaco ]. We thank you, Jaybird. Everyone do me a solid and hit that like button, first and foremost, so I can feel good about myself, right? I can feel like, okay, people like the stream, which means they like me, which means I'm good to go. So hit that like button, please, and thank you. Some other housekeeping items to address before we get going, As we do with every event, we have an interactive component to today and you can win a free year of Benzinga Pro. Here's what you have to do. You just have to scan that code that's up on the screen there. And during the day, at random points, whenever I deem it necessary, I will just bring up questions from our slider poll. All you got to do is participate. You don't even have to get them right. You just have to participate. And at the end of the day, we will do random drawing, and a random person who participates will win a free 1-year sub of Benzinga Pro. So just scan that link. I'll put this code up again throughout the day. So not to worry if, for whatever reason, you don't have your phone right now or -- yes, whatever. So I'll make sure that's up throughout the day. So a great day of speakers today, interviews, panels, presentations. I just want to say again -- and I do say this every time. I say this with the All Access event. I'll say with our health care conference next week as well is this is a conference that Benzinga works really hard to put together. Our events team has been planning this for literally months. I don't know when they started, but it was probably back in the early summer, as soon as we got that feedback that we wanted to do an EV event. So this takes a lot of time to put together. And as I say every time, all the companies that are appearing at our event today, because it's a virtual event, they are paying to be here. That being said, all these speakers, they don't know what we're going to ask them. [Operator Instructions] So they don't know what's coming from the chat. They don't know what's coming from us. But just like we do for real in-person events, in the normal before times and soon to be, companies will pay to peak at real events and they will pay to speak at virtual events as well. So companies are paying to speak here today. But they don't know what we're going to ask them, they don't know what you're going to ask them and they are okay with that. And then last plug before we get to our first -- our keynote presentation is I want you to go to [ bzevents.com ] and check out our upcoming calendar. Our next event is next week. But our next in-person event is only 3 weeks away in October, October 14 and 15 in New York City. I'll be there, okay. At least I think I will. I'm pretty sure I'll be there. I'll be there, okay? I want to see you there as well. So I didn't even know that was playing. Never mind. That's from my own thing. So [ bzevents.com ], okay? Check it out, our next virtual events and our next in-person event. We're almost there. It will be our first in-person event since before COVID. It will be hybrid, don't worry. So it will be in-person and it will be virtual. So not to worry about that. But yes, check that out, [ benzingaevents.com ] or [ bzevents.com ]. Now all that -- I think I got through all the housekeeping things. I told you all to hit the like button. I told you all to subscribe and check out the site and all the good things. I think we can go now to our first presentation of the day. It's our keynote presentation. It is Grant Sabatier, who, if you're active on YouTube, you may know, he is the founder of Millennial Money. And Grant is joined by Alan Wexler. He is the Senior Vice President of Innovation and Growth for General Motors. So Grant, take it away.

Spencer, we're super excited to welcome this next guest. Alan Wexler is the Senior Vice President of Innovation and Growth at General Motors. Alan, I'm really looking forward to this discussion about EVs and the investing opportunity at GM. So Alan, tell us a little bit about your background before you came to GM a year ago.

Hey, Grant, thanks, and I'm really excited to be here today to speak to all of you and have a conversation with you specifically, Grant. But my background, I've spent my entire career dealing with disruption and specifically in the area of digital. And from a consulting space, I led a large consulting company using the blend of creativity, technology and business strategy to help companies either disrupt in their industries or protect themselves from disruption by embracing not just digital products and services but also changing the way they work, starting with culture, starting with the way they develop software, starting with a focus on customer experience. So I spent my entire career doing that. And then I got a call about 2 years ago from General Motors and had some great conversations with Mary and other members of the leadership team. And I just would share with you that the vision of zero congestion, zero crashes, zero emissions is something that kind of got me to answer the call, first of all, to do something really meaningful for the planet and for people. But really, when you get to connect with the leadership of General Motors, you find that there's this kind of mission orientation. There's this amazing culture and this passion to really make a difference for the world. That was the thing that first attracted me. And the second thing I would just say is this industry and GM specifically has an opportunity to really transform the way we think about vehicles and beyond the vehicles. And it's once-in-a-lifetime opportunity to really be on the inside of a company at a time when transformation and disruption is just so in front of us.

Yes. So thanks for that, and welcome to GM. Let's kick things off by talking about the broader EV industry and market. There's been so much movement over the past year given the new infrastructure bill, increasing environmental concerns, the increased interest from retail investors. Where is the EV industry and market headed in your opinion?

Well, for me, it starts with climate change, first of all. And addressing climate change really requires everyone, every company to do their part. It's an imperative, frankly, for our planet. And so having sustainable transformation is a way of really making -- or contributing to make an impact. More specifically, when I think about EVs and the government, what needs to happen, we really need to invest in infrastructure and the government needs to help with that. And that has to do with fast charging stations, specifically on along highways and particularly in cities. We need to focus on incentives for consumers. And so focusing on both the electrification, the grid to support the infrastructure for these vehicles and also focusing on creating the right incentives to assure that consumers adopt. So pretty amazing time in this market. And there's no question as to what's happening. I mean the tide has turned not just with General Motors but with our competitors. We're all in.

So one of the things not a lot of investors might know is that GM has been in the electronic vehicle market for quite some time. So this isn't your first time around the racetrack. But everything is moving so quickly. Can you talk for GM specifically, what's your approach? And what goals does GM have towards moving to an all-electric future?

Yes. It's a great question, Grant. It's 4 years. I mentioned zero crashes, zero emissions and zero congestion, but it's 4 years since we announced that as our vision. And what we did is we announced the Ultium as our EV platform. And because of Ultium, if you follow the technology and how it works, it's really -- we've taken very much a platform approach to design in the technology. We have the privilege of getting to go to a design center and seeing the vehicles and the models that we're working on, not just the ones we announced around the Hummer and the Silverado and the LYRIQ but other things in our pipeline. And what really hits you, which is striking when you get to meet with our head designer, Michael Simcoe and others, is because of this technology, because of the way it's designed, the creative landscape for our designers to create all these different vehicles on top of this platform is just amazing. And to see it with your own eyes, it really brings it to life. We did mention the Hummer EV. And I've had the privilege of driving that vehicle. It's unlike anything you've experienced in the past, whether it's the Crab Mode or it's the turning radius or -- it just feels very nimble for a pretty large size vehicle. And it's because of this Ultium platform, we were able to do that. And we're also excited about the recent announcement of the Chevy Silverado. I think it redefines how people think about trucks. I'm a proud owner of a Silverado. And frankly, I can't wait for the EV version to come out.

So one of the things not a lot of investors know, and we are at an investing event is about your transition towards more of a software company than just an auto company. So can you talk a little bit about from an innovation standpoint? I know you've hired just an immense number of engineers over the past year. You're investing in the different software platforms. And you're also making these platforms available to other vehicle manufacturers. I know you have different partnerships all across the globe. Why should the audience and listeners place their bets on GM as an investment as you extend beyond just making vehicles?

Yes. Grant, thank you for bringing that up. The platform word is really critical, frankly, when we think about the future of the company. As I speak about Ultium, I speak about it as a platform. And not just a platform for the 30 EVs we announced but a platform for partnerships with Honda and others when we talk about Hydrotec, frankly, because that's a technology that we're really very excited about. And we announced our partnership with Navistar. We are rethinking the company, frankly, and our future as a platform company. And it goes beyond vehicles. I mean with vehicles, it extends to things like BrightDrop and our commercial delivery vans, but it goes beyond vehicles. We think given this technology, there's an opportunity to power planes, trains, automobiles, and even beyond transportation. So excited about that. And software specifically that you asked about -- the vehicles, you look at the vehicles as a platform. And with the advent of all the EVs coming out, it gave us the opportunity to rethink the vehicle as a platform, similar to how you might think about your iPhone or Android phone. And with that, we believe there's all these opportunities that we're working on to create experiences and services, leveraging data in the vehicles and beyond the vehicles that we have on our customers and what we think will make them excited and create value for them but also even going outside of the vehicle. So great experiences in the vehicle, going outside of the vehicle, OnStar Insurance. We announced Guardian, which is a safety app that extends OnStar from in the vehicle, outside of the vehicle. Obviously, Super Cruise, we think it's the predominant and the best self-driving capability out there. We're really going in a very big way around seeing the vehicle as a platform and becoming very digitally centric company as we extend the software opportunities to help create better experiences for our customers.

Yes. And going back to this idea of early mover advantage, I know you were early in the EV space, have done a lot of innovation. I know when your CEO, Mary Barra, came on board, she was really the first of the large automakers to make such a declarative commitment to EVs before any of the car companies were talking about it. And just the multibillion -- I think it's like $25 billion investment over the next several years. Your stock has been really on a tear this year, outpacing the S&P 500. Certainly, outpacing Tesla and most of the EV stocks in the market. Can you talk a little bit about GM just from an investing standpoint? You have so much at play here. A lot of America thinks that everyone is going to be driving a Tesla in the next 5 to 10 years. I actually wholeheartedly disagree with that. I've had the opportunity to drive a number of Teslas. I'm not a Tesla driver. But when you think about the market opportunity here, basically, Tesla drivers are on the coast, whereas most of America, they're going to be driving the GMs. They're going to be driving your cars. And so I see just the scale of this investing opportunity being so immense. And just your storied history behind it, you are the quintessential automaker in the United States. And I think that the market really does value that. So you're mixing your history and your deep passion for innovation with this new market. Can you talk a little bit about, from an investing standpoint, what does GM actually need to do to be successful to capitalize on this opportunity in the coming years?

Yes, it's great. And Grant, I think you partially answered the question because I hear the passion in your voice. And you're honing in on, I think, what's so special about GM. I mean we have a heritage of really making a difference for people in the world. And a lot of that is primarily through the vehicles that we built. But all of the engineering that we've done over the years at scale, very much a focus on safety, creating great experiences. But also, when we talk about these 30 vehicles by 2025, for us, it's always been about kind of going wide in having multiple brands, multiple types of vehicles for all different -- whether you're on the left coast or the right coast or in the middle. So our focus has always been on kind of going broad to appeal to customers in different segments, different desires. And so we're doing that, as I said, with the Ultium platform. So from an investment perspective, what I'd ask the investors to think about is look at the scale, the history of GM, the mission, our engineering capability. And then I'd say, look at the team. This is a mission-oriented team, as I've ever seen in my experience in consulting. I've worked with companies in many different industries, including the industry I'm in now. And I've never been with a team of people who are as passionate for all the right reasons about this transformation. I would also say that the way we work is changing. I think you see when we announced BrightDrop, as an example, it's not just a vehicle. When you -- when Mary announced BrightDrop at CES, we focus on a solution. So we're approaching this first and last mile aspect of delivery. The test with FedEx already have proven over 25% efficiency gain because we're focusing on not just the van itself and the experience of the van and the electrification. But we're developing a software solution around that and devices, starting with the e-pallet, to actually deal with the first- and last-mile opportunity. So we took a solution focus. In this case, we brought in a software entrepreneur, Travis Katz, to lead that business. And so we're building out a solution for that OnStar Insurance. I talked about OnStar Guardian. We won a great defense contract with the Infantry Squad Vehicle. So what you're seeing with General Motors that I'd ask investors to take a look at is the reshaping of our business and our business model, and not just the business model but how we operate to achieve our market potential, which goes well beyond the businesses that we're in today.

And what about the global opportunity? I know -- I believe you have one of the best-selling partnerships for tiny vehicles. There's this tiny vehicle EV vehicle in China that you've worked on. Can you talk about some of the global scale of this opportunity from an investment standpoint?

Sure. I mean I think the opportunity beyond North America is huge. And frankly, there is an opportunity from a disruption perspective in some cases, where we might not have a lot of scale to move like a disruptor, to move like an early player in some of these markets. And with the advent of EV, there's really this opportunity to approach these markets. And you're seeing it with the vehicle you mentioned in China in kind of a new and a fresh way. So I'd also say that as we design these vehicles and gear them towards different countries in different markets using the Ultium platform and technology, there is a tremendous amount of kind of flexibility in the design of the vehicles and how we think about the front seat versus the back seat and how we think about range and size. And so there's really an opportunity for us to look at each market from a more custom way.

Yes. And I love this idea of innovation and disruption. We're talking a little bit about this offline. I'm a huge fan of Clayton Christensen's work. I've had the opportunity to chat with him and hear him speak a couple of times. And we certainly are in this age of disruptive thinking. But I think those words get thrown around a lot as kind of buzzwords in the industry. Can you talk a little bit specifically about how do you think about disruption and innovation especially as it pertains to General Motors? Is it the software platform? Is it the subscription model? Is it the partnership with -- I mean how do you define innovation and disruption in this industry?

Yes. Grant, I spent -- like I said, I spent my entire career dealing with disruption. So I've seen companies get disrupted, and I've seen companies successfully disrupt. And disrupt might be a little bit of a harsh word, but when you think about self-disruption, what really -- the essence of a great company for me is one that's willing to take a risk, a business risk, not a safety risk, but a business risk in disrupting how -- not just what we do but how we do it. So our announcement around Ultium, we could have easily said we're going to electrify ICE vehicles and do it in a very serial process. No, we actually made a very big announcement around Ultium and electrifying 30 vehicles with this new platform. So what you see with General Motors is we're leveraging our scale, our capability, our legacy, our knowledge of our customers, our data. But we're working in new ways to really change the way we think about our business and what we could do for our customers, and that goes beyond the vehicle. So for me, I'd say, in my career, where I've seen it work right is when the leadership team of the companies, they have the willingness to disrupt how they do business, what they do, but they also go all in. And so while General Motors is a very large company, 160,000 employees or so, in some ways, in my experience, we work very much like a start-up in terms of how connected the leadership team is, how -- the other thing I'd say is how connected our people are, starting with their vision all the way through our behaviors and our values, how we think about ESG and our role in the world. One last thing I'd share with you is early on, when I started, we developed what we call our growth strategy. And our growth strategy, what -- it does a couple of key things. It specifically calls out platforms. I talked about that a bit. It specifically calls out software and services not as something that's an add-on to a vehicle but that's as important to our future as the vehicles themselves. It specifically calls out how our people are part of this journey. And what we've been doing with this growth strategy is basically, it's been the guidepost, if you will, or to set the context for our future, for our people. So while we do share it externally, some aspects of it, it really sets the context for our people to innovate. And then what we do is we encourage, we focus on retaining and recruiting the best talent in the world that goes beyond the vehicle. And then we encourage everyone to really take ownership for the direction of where we're going and innovate. So that to me is the magic of great companies that disrupt themselves, is when everyone is on board, everyone is creating the future, and we're all in as we say.

Yes. I know your passion for this is really infectious. I love the answer around just culture and how it's being transformed from the inside. And you've got a lot of innovative thinkers who are willing to take risks and move quickly and operate very much like a start-up, which is certainly needed in this space. So last but not least, whether it's software or a particular car or something else, what are you most excited about in the pipeline?

Yes. For me, I mean, there's a couple of things I'm excited about. One is, as I mentioned, when you get a glimpse into our design studio and you get to see the things that are coming in the future, boy, it really hits you. When you get -- I've toured most of our manufacturing facilities now. And when you see what our people are doing to kind of embrace our future and you know a bit about GM's culture, you get really excited because everyone you meet is excited within the company around leaning into the future. I think the other thing that excites me the most, and like I said, I think -- not the industry. I mean there are other industries that have been disrupted. You can go back to travel, financial services, retail. They've gone on that curve. But when you think about General Motors and you think about our industry, it's early days of disruption. And so what gets me most excited about is that our future -- I think the future of our company looks very different than the way it is right now. And whether that's EVs or it's autonomous -- think about autonomous just for a second and our ownership of Cruise and how we're thinking about autonomous in the future. At some point, the riding in the back seat of a vehicle or riding in a vehicle, the experience will be totally different than the way it is today. And that gets you to start thinking about what software and services and experiences can we deliver when driving is really unlike what driving is today, in today's context. You're sitting in the backseat. I think about an elderly person who now can't go to the beach or go shopping. And now know with autonomous, they can. And while they're in the vehicle, what are they doing in the vehicle? And how do we create these experiences that I think are great for people, frankly, but also will be great for business? And I would tell you that we're leaning into all of that: thinking about the future of our business model, how we operate to achieve it; running like a big company because we have the scale and the engineering and the people and the culture; but also acting like a small company when it comes to how we think about developing software and services in the future. So it's a pretty magical place to be right now, Grant.

Well, thanks so much, Alan, for taking the time to chat with me today. I'm excited to follow your journey and GM. And thank you, everyone, for tuning in. This is Alan Wexler, the Senior Vice President of Innovation and Growth at General Motors. Thanks for the chat and hope you have a nice day.

Thanks, Grant.